Gardner Denver, Trident USA Revise Rates; Loan Prices Climb

July 22 (Bloomberg) -- Gardner Denver Inc. and Trident USA
Health Services revised the interest rates they are willing to
pay for debt financing. Leveraged-loan prices in the U.S. rose
for a 10th straight day.

Gardner Denver, the Wayne, Pennsylvania-based industrial-equipment maker, lowered the rate on a $1.9 billion term loan
backing its buyout by KKR & Co. to 3.25 percentage points more
than the London interbank offered rate, with a 1 percent minimum
on the lending benchmark, according to a person with knowledge
of the deal who asked not to be identified because the terms are
private.

Trident, a provider of clinical laboratory testing services
based in Sparks, Maryland, increased the amount it’s offering to
pay lenders, according to a separate person with knowledge of
that deal. It will now pay lenders 5.25 percentage points more
than Libor for a $340 million first-lien term loan, up from 4.5
percentage points to 4.75 percentage points initially proposed,
the person said. The loan will have a 1.25 percent floor on
Libor and be sold at 99 cents on the dollar.

Prices for junk loans rose to 98.34 cents on the dollar,
according to the Standard & Poor’s/LSTA U.S. Leveraged Loan 100
Index. It marks the 10th day in a row that prices have risen
amid record demand for the floating-rate debt. Investors poured
$1.8 billion into funds that purchase leveraged loans in the
U.S. last week, an all-time high, according to Bank of America
Corp.

Smurfit Kappa Group Plc, a manufacturer of board packaging
products, also changed its debt package, which now includes a
750 million-euro ($989.6 million) term loan with a margin of
2.25 percentage points more than Euribor, according to two
people with knowledge of the financing, who asked not to be
identified because the terms are private.

Smurfit Kappa

Smurfit Kappa’s debt package also includes a 625 million-euro revolving line of credit, the people said. The debt is
being used to refinance an existing senior-secured facility for
the Dublin-based company.

Gardner Denver’s term loan was increased by $100 million,
the person said. The financing also includes a $400 million
revolving line of credit, according to the person.

The company had previously revised pricing on July 18,
offering to pay lenders 3.5 percentage points more than Libor,
with a 1 percent Libor floor for the U.S. term loan, the person
said. It had offered initial price guidance of 4 percentage
points to 4.25 percentage points more than Libor for the term
loan on July 9, the person said. Libor is the rate banks say
they can borrow in dollars from each other.

Lender Discount

The seven-year debt for Gardner Denver will be offered to
lenders at 99.5 cents on the dollar, compared with the 99 cents
previously proposed, the person said.

KKR, the private-equity firm run by Henry Kravis and George
Roberts, agreed to buy Gardner Denver for about $3.7 billion.
The deal is valued at about $3.9 billion, including the
assumption of Gardner Denver’s debt.

In a revolving credit, money can be borrowed again once
it’s repaid; in a term loan, it can’t.